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NEED Has Become a Necessity

Valley Perspective

Loan is a gamble, but alternative is leaving neighborhood in ruins

February 09, 1997

Sending good money after bad rarely makes sense. But in the case of a nonprofit developer behind on quake repairs in North Hills, it may be the only option. Last week, Housing Department head Gary Squier said he would recommend loaning Neighborhood Empowerment and Economic Development, or NEED, more money to jump-start work on projects that have languished for months.

NEED, which is politically connected to Los Angeles City Councilman Richard Alarcon, estimates it may require as much as $1 million more to complete repairs on buildings in North Hills' Orion-Parthenia neighborhood, one of the hardest hit by the Northridge earthquake. That money would come on top of the $6 million already loaned to NEED for projects in the neighborhood.

Inexperience on NEED's part and lack of oversight by the Housing Department caused the delays. But helping the group get back on track makes sense. No other developer expressed interest in repairing the buildings and NEED already has completed much of the preparatory work. To avoid similar situations, Squier has vowed not to give such lucrative projects to novice developers such as NEED.

This new wave of money must come with the Housing Department's strict supervision and equally strict adherence to deadlines by NEED. Squier suggests the money be used as a bridge loan that will allow projects to get moving as NEED obtains more traditional construction financing. The City Council should insist on guarantees and establish a schedule for progress. NEED already faces the threat of having its buildings demolished if work doesn't begin soon. It's a gamble, to be sure, but to do nothing only guarantees dilapidated buildings that attract drug dealers and prostitutes to one of the San Fernando Valley's toughest neighborhoods. That's a zero return on the public investment already made.

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